Though he began as a dealer — practically tripling his preliminary funding in Tata Tea (now Tata Shopper) in 1985 inside three months — his funding philosophies had been primarily based on basic analysis and speaking to the administration. And his practically four-decade investing life, one may clearly relate to the adage ‘today’s small cap is tomorrow’s massive cap’.
Jhunjhunwala thought-about a number of parameters earlier than investing in an organization. First was to take a look at the chance the corporate supplied. Then got here the aggressive benefits like capital, branding and placement. The issue he thought-about was the flexibility to scale up a enterprise. As a result of for a small cap to turn into a big cap, scalability is the important thing, Jhunjhunwala had advised TOI prior to now.
The standard of individuals and the enterprise’s capability to generate money had been the opposite issues for him. He additionally believed in shopping for a top quality firm at an excellent value.
He most well-liked to spend money on small cap shares which is able to turn into a big cap sooner or later. Up to now 20 years, he repeated this course of in a number of such corporations as Titan, Crisil, Praj Industries and Aptech.
In current occasions, on the peak of the Covid-induced countrywide lockdown, he invested in Indian Lodges. Between March and June of 2020, the inventory was hovering within the Rs 75-80 vary.
Jhunjhunwala purchased 1.25 crore shares of the hospitality main, translating into somewhat over 1% of the corporate. Over these months, he additional doubled his funding within the firm to about 3 crore shares (2.1%) and the inventory has gone up greater than three-and-half occasions to its Friday shut of Rs 272 on the BSE.
“Rakeshbhai (as he was popularly called) was a good judge of people. He trusted those promoters who were truthful and had a strong positive attitude,” mentioned considered one of his shut associates. “Also, he was a risk taker with a long-term vision. For him the long term was 5, 10, 15 years. He would invest and was ready to wait for the company to show results.”
Jhunjhunwala was additionally a robust believer within the India story. In late Eighties and Nineteen Nineties, when a number of of his associates left India for greener pastures, he refused to shift overseas. Be it a bull market or a bear market, throughout interviews and likewise whereas speaking to associates, he would say that the largest bull market in India was but to reach.
“He was the biggest India bull I’ve come across in my 40 years in the market,” mentioned a broker-turned-wealth supervisor who knew Jhunjhunwala for greater than three many years. “He was an eternal optimist. He always believed he would make more money tomorrow than how much he made today.”